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Aromatics (Thailand)
Tisco Securities has maintained its "hold" recommendation on Aromatics (Thailand)'s stock, with a 12-month target price of Bt37 per share.
Aromatics announced a third-quarter net profit of Bt2.8 billion, a rise of 208 per cent year on year and 159 per cent quarter on quarter.The robust quarterly result was driven by wider product spreads and higher sales volume. The average product spread in the third quarter rose to US$180 (Bt6,611) per tonne from $122 in the same period last year and $109 in the previous quarter, while the sales volume of about 750,000 tonnes was 23 per cent higher on the year. For the fourth quarter, the brokerage estimates that Aromatics' net profit will decline by 26 per cent quarter on quarter to Bt2.1 billion due mainly to a lower average product spread of $162 per tonne (versus $180 in the third quarter). In addition, management has indicated Aromatics will have to book extra expenses of about $3 million in the quarter for oil-tank rentals. To reflect a revised estimate of the average product spread, the brokerage has raised its earnings estimate in 2006 by 41 per cent to Bt6.33 billion, by 24 per cent to Bt5.99 billion in 2007, and by 3 per cent to Bt6.42 billion in 2008.
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